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Two VMD(TM) Enabled Speakers Provide Full Movie Theater Experience Via Zoran Audio Processor

Targeted at mainstream consumer applications such as home theater, television receivers, computer gaming and compact audio systems, the VMD processing solution creates a high quality surround sound at new price points for system manufacturers. Zoran's VMD has already been adopted by several well known speaker manufacturers, whose speakers, empowered by Zoran's VMD, are expected to be on the market in the first quarter of 2000.

The Zoran VMD algorithm analyzes the position of sound sources present in two channel audio signals and recreates the sound field existing at the time of the original recording. A single digital speaker powered by Zoran's VMD technology will produce a high precision, space filling 180 degree sound field when connected to any two channel source such as a CD player, FM stereo radio, Video CD, SVCD, or DVD player, VHS cassette player or stereo television set. When four channel sound from a DVD player or Microsoft's Direct Sound(TM)-equipped personal computer or video game console, is connected to two VMD powered speakers, one in front of the listeners and one behind, a 360 degree, fully immersive, continuous, surround sound field is created which must be heard to be fully appreciated. The dual speaker configuration will enable a complete, very compact, low cost 360 degree surround sound home theater or computer gaming system to be created from a pair of low cost VMD-enabled powered speakers and a DVD player or a DirectSound 4 channel gaming console or computer. A television receiver, with an appropriately designed built-in speaker enclosure, can incorporate Zoran's 180 degree VMD processing in the receiver, thus eliminating the need for a separate VMD powered speaker.

According to Forward Concepts (July, 1999), 37.3 million units will be sold to the consumer and PC digital speaker market in the year 2000, expanding to 135.8 million units in 2003. ``We believe that much of this market will be dominated by inexpensive audio systems designed to fit into today's limited living space,'' said Paul Goldberg, Zoran's Vice President of Audio Products. ``Zoran audio processors, combined with VMD and our patent pending VMD powered speaker configurations, make it possible to address these venues with high entertainment value products at very attractive price points.''

``To make it easy for manufacturers of home theater, gaming systems, television receivers and compact audio systems to take advantage of VMD processing, Zoran is offering complete reference designs, based on the Zoran ZR38601 and ZR38650 IC, which incorporate the VMD algorithm,'' said Michael Neidich, Manager of Audio Marketing for Zoran. ``These reference designs are now available to qualified OEMs.''

ABOUT ZORAN

Zoran Corporation develops and markets integrated circuits (ICs), IC Intellectual Property (IP) cores, and embedded and PC software for digital audio and video applications enabled by compression. Zoran also provides complete reference designs based on Zoran's technology. Zoran's product lines and IP include JPEG codecs, MPEG and DVD decoders, digital still camera system on a chip and digital audio. All of these standard-based products benefit from Zoran's ``Standards Plus(TM)'' technology. Zoran's ICs are used in numerous digital audio and video products. Leading applications incorporating Zoran's products and IP include professional and consumer video editing systems, filmless digital cameras, standalone consumer DVD players, SuperVCD players, digital speakers and audio systems.

Zoran is headquartered in Santa Clara, California with additional operations in Haifa, Israel, Toronto, Canada and offices in Tokyo, Japan and Shenzhen, China. For more information about Zoran call (408)919-4111, or visit our website: www.zoran.com.

Virtual Multichannel Digital, VMD and Standards Plus are trademarks of Zoran Corporation

DirectSound is a trademark of Microsoft Corporation

Contact:

     Zoran Corporation
     Karl Schneider, 408/919-4111
     ir@zoran.com
         or
     The Carson Group
     Helyn Corcos (Investors), 415/989-3577